KUALA LUMPUR: There will be no winner in the United States (US) sweeping global tariffs and similar responses from other countries, and the only way forward is through negotiation to minimise the damage, said former Bank Negara Malaysia assistant governor Tan Sri Andrew Sheng.
He explained that the disagreement between President Donald Trump’s trade adviser, Peter Navarro, and businessman Elon Musk highlights the controversy surrounding the tariff issue, both within the US and internationally.
“The key issue is who will pay the tax?”
“It will be the American consumers and companies. The negotiation is not just with foreign countries; there is also a major internal debate in the US on who will pay for it,” said Sheng, who is the chairman of the George Town Institute of Open and Advanced Studies and a Distinguished Fellow of the Institute for Capital Market Research.
It is to be noted that ASEAN’s Indochina member states were the hardest hit by the tariffs, with Cambodia facing combined baseline and retaliatory duties totalling 49 per cent, followed by Laos (48 per cent), Vietnam (46 per cent), and Myanmar (44 per cent), which took effect today.
Thailand was subjected to tariffs of 36 per cent, Indonesia 32 per cent, Brunei and Malaysia both 24 per cent, and the Philippines 17 per cent, while Singapore faced a baseline tariff of 10 per cent.
Speaking on the sidelines of the ASEAN Investment Conference 2025 today, Sheng noted that Malaysia has an open trade system, and the key to navigating these tariffs lies in ensuring the quality of its products and services.
“In the semiconductor sector, the chips themselves are exempt. What is less clear is how much the equipment used to manufacture chips—which Malaysian companies excel in—will be affected.
“But it is not so simple because who is the major importer of Malaysian equipment? It is not Malaysians; it is the American companies. So it is really up to the American companies to negotiate with the US government, less so for Malaysian companies to negotiate with the Malaysian government,” he said.
Sheng emphasised that Malaysia has a significant opportunity to negotiate with the US on this matter.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz is set to lead Malaysia’s delegation to Washington at the end of this month to discuss the tariffs imposed on Malaysia.
He will be accompanied by deputy secretary-general (trade) Mastura Ahmad Mustafa and other officials from the ministry. Representatives from Malaysia’s embassy in Washington will join the delegation.
